Preliminary and Subsequent Heirs under German Law

Preliminary and Subsequent Heirs under German Law

A testator may wish to exert influence over an inheritance after death. For example, a testator may name his wife as the sole of heir of his estate, but may also want to prevent the estate from passing to her children from a prior marriage upon her death. In common law jurisdictions the testator will generally achieve such effects by creating a (testamentary) trust. However, as German land law does not allow to transfer German situs assets to a trust in a strict sense, this is not a solution as far as assets in Germany are concerned. Therefore, the testator may be forced to use comparable German instruments, such as durable execution of the Will (Dauertestamentsvollstreckung), life tenancy / usufruct (Nießbrauch) or Preliminary and Subsequent Heirship (Vor- und Nacherbschaft) or a combination thereof. This article provides a general introduction to German law pertaining to Subsequent heirship.

Basic Principles of Preliminary and Subsequent Heirship (Vor- und Nacherbschaft)

In order to achieve a result that is consistent with his/her wishes the testator may provide that the estate first passes to the preliminary heir (Vorerbe) and upon the satisfaction of a certain condition, to the subsequent heir (Nacherbe). See § 2100 of the German Civil Code (BGB).

The condition may be a specific event (e.g., the death of the preliminary heir) or a specific point in time (e.g., on January l, 2015). If the testator appoints a subsequent heir, but does not determine when the subsequent heir is to succeed to the estate, it is presumed that the subsequent succession shall occur when the preliminary heir dies. See § 2106 (1) BGB

The preliminary heir is an heir (Erbe) in the meaning of § 1922 BGB. Consequently, upon the death of the testator, all assets and liabilities pass to the preliminary heir as the universal successor of the testator. See § 1922 (1) BGB. However, his freedom to dispose of estate assets is limited by § 2112 BGB.

Limitation of the Powers of the Preliminary Heir to dispose of Estate Assets

The preliminary heir may not:

  • Dispose of real estate, rights in real estate (e.g. mortgage) or a registered ship. See § 2113 (1) BGB.
  • Make donations / gifts out of the estate unless there is a moral duty to do so. See § 2113 (2) BGB.
  • Mortgage real estate that is part of the estate. See § 2114 BGB

Upon the event giving rise to the succession of the subsequent heir, any dispositions made in contradiction of § 2213 BGB or § 2214 BGB automatically become ineffective, insofar as it would defeat or impair the right of the subsequent heir. However, a bona fide purchaser who has no knowledge of the limitation of powers of the preliminary heir (e.g. because the subsequent heirship was erroneously not mentioned in the certificate of inheritance) may acquire the property free of any limitation. See § 2213 BGB

Rights of the Subsequent Heir

The relative rights between the preliminary and the subsequent heir are comparable to that of a trust with regard to the property of the preliminary estate:

  • The preliminary heir must properly manage the estate and preserve it for the subsequent heir (See § 2134 BGB);
  • Upon request he must make an estate inventory (Nachlassverzeichnis) and must account to the subsequent heir (See § 2121 BGB); and
  • In certain situations he may be obliged to maintain the assets in a neutral depository institution (See § 2128 BGB). 

Please note: Most sections of the German Civil Code are default rules. The testator may release the preliminary heir from the restrictions and obligations of § 2113 (1) and §§ 2114, 2116 to 2119, 2123, 2127 to 2131, 2133 and § 2134. This is generally done by stating in the Will that the heir shall be "befreiter Vorerbe". As the testator may also release him from the duty to preserve the estate, a "befreiter Vorerbe" may also use the principle of the estate for himself. 

Occurrence of Subsequent Succession

Upon the occurrence of subsequent succession, the preliminary heir must distribute all estate assets to the subsequent heir in a condition consistent with proper management of the assets while held by the preliminary heir. 

The subsequent heir is not a successor to the estate of the preliminary heir, but rather succeeds to the estate of the testator. This is true even where the subsequent succession occurs at the time of the preliminary heir's death. In such a case, succession to the testator's estate and succession to the preliminary heir's own estate must be distinguished:

  • The remainder of the testator's estate passes to the subsequent heir as determined by the testator's will.
  • The preliminary heir's estate is inherited pursuant to the general rules of testate or intestate succession.

The testator may also appoint more than two heirs successively. However, appointment of a subsequent heir becomes void 30 years after the testator's death, unless the condition for the succession of the subsequent heir has occurred before that period has lapsed. See § 2109 BGB.

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